loan application - republic bank · 2019-07-08 · if this is an application for joint credit,...

LOAN APPLICATION

Do not complete if this is for individual unsecured credit

If residing at present address for less than two years, complete the following If residing at present address for less than two years, complete the following

Federal law requires that we obtain, verify, and record information that identifies each person who opens an account. We will ask your name, address, date of birth and other information that will allow us to identify you, such as your driver license.

If this is an application for joint credit, Borrower and Co-Borrower each agree that we intend to apply for joint credit:

6

Borrower signature

6

Co-Borrower signature

Identification

1. Loan Request (complete in all cases)

q Home Equity Line of Credit

q Interest Only - Home Equity Line of Credit

q Home Equity Loan

q Deposit Secured

q Personal Unsecured Line of Credit

q Personal Unsecured Loan

q Auto

q Cash Reserve

Loan Amount

$

Loan Term

months

Loan Purpose

q Home Purchase

q Home Refinance

q Home Improvement

q Debt Consolidation

q Other

Automatic Payment Deduction (APD) from a Republic Bank Account

q Yes, Account No.

2. Borrower Information

Borrower’s Name (include Jr. or Sr. if applicable)

Home Phone (include area code) Email

q Married q Separated

q Unmarried (includes single, divorced, widowed)

DOB (mm/dd/yyyy)Social Security #

Present address (street, city, state, ZIP)

Mailing address, if different from present address

County

Former address (street, city, state, ZIP)

Borrower’s Name (include Jr. or Sr. if applicable)

Home Phone (include area code) Email

q Married q Separated

q Unmarried (includes single, divorced, widowed)

DOB (mm/dd/yyyy)Social Security #

Present address (street, city, state, ZIP)

Mailing address, if different from present address

County

Former address (street, city, state, ZIP)

(Borrower) (Co-Borrower)

q Own – No. Yrs.

q Rent – No. Yrs.

q Lives with relative – No. Yrs.

q Own – No. Yrs.

q Rent – No. Yrs.


q Own – No. Yrs.

q Rent – No. Yrs.


q Own – No. Yrs.

q Rent – No. Yrs.


Joint Attestation (sign below)

(Co-Borrower)

Gross Monthly Income

Base Empl. Income*

Overtime

Bonuses

Commissions

Dividends/Interest

Net Rental Income

Other (before completing, see the notice in “describe other income” below)

Total

Describe Other Income

Monthly Amount

$

$

Borrower/Co-Borrower

Notice: Alimony, child support, or separate maintenance income need not be revealed if the Borrower (B) or Co-Borrower (C) does not choose to have it considered for repaying this loan.

Borrower

$

$

$

$

$

$

$

$

Co-Borrower

$

$

$

$

$

$

$

$

Total

$

$

$

$

$

$

$

$

Combined Monthly Housing Expense

Rent

First Mortgage (P&I)

Other Financing (P&I)

Hazard Insurance

Real Estate Taxes

Mortgage Insurance

Homeowner Assn. Dues

Other

Total

Present

$

$

$

$

$

$

$

$

$

3. Employment InformationDates (from - to)

Business Phone (include area code)

Name & Address of Employer

Position/Title/Type of Business

q Self Employed

County

If employed in current position for less than two years or if currently employed in more than one position, complete the following: (attach additional sheet if needed)

Dates (from - to)




q Self Employed

County

Dates (from - to)




q Self Employed

County

Dates (from - to)




q Self Employed

County

4. Monthly Income and Combined Housing Expense Information

* Self Employed Borrower(s) may be required to provide additional documentation such as tax returns and financial statements.

Property Address (Enter PS if pending sale or R if rental being held for income)

Totals

Present Market Value

Mortgage Payments

Amount of Mortgages & Leins

Insurance, Maintenance, Taxes & Misc.

Gross Rental Income

Net Rental Income

5. Schedule for Real Estate Owned (if additional properties are owned, use continuation sheet)

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

6. Complete this section if you are paying off creditors with proceeds with this loan request1. Creditor

2. Creditor

3. Creditor

Payoff Balance $

Payoff Balance $

Payoff Balance $

4. Creditor

5. Creditor

6. Creditor

Payoff Balance $

Payoff Balance $

Payoff Balance $


Borrower

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

If you answer “Yes” to any questions (a) through (m), please use space below for explanation

(a) Are there any outstanding judgments against you?

(b) Have you been declared bankrupt within the past seven years?

(c) Have you had property foreclosed upon within the last seven years?

(d) Are you a party to a lawsuit?

(e) Are you obligated on any loan which resulted in foreclosure, etc...?

(f) Are you presently delinquent or in default on any Federal debt, loan, etc...?

(g) Are you obligated to pay alimony, child support, or separate maintenance?

(h) Is any part of the down payment borrowed?

(i) Are you a co-maker or endorser on a note?

(j) Are you a Non U.S. citizen?

(k) Are you a permanent resident alien?

(l) Have you had merchandise reposessed?

(m) Have you been denied credit with this lender previously?

Co-Borrower

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

q Yes q No

7. Complete this section if you are applying for a Home Equity Loan or Line of CreditCollateral property address (street, city, state & ZIP)

County

Occupancy

q Principal Residence

q Secondary Property

q Investment

Property Type

q Single Family

q Condo

q 2 to 4 Family

q PUD

q CO OP

Year Aquired

Property Value

$

Amount Existing Liens

$

Lien HolderSource of Down Payment, Settlement Charges, and/or Subordinate Financing (explain)

Property to be held in the name(s) of

8. Complete this section if you are applying for an Automobile LoanMake Model Year Mileageq New

q Used

Serial No./Vehicle Identification Number (VIN)

Down Payment – $Complete Name, Address and Telephone Number of Seller

Purchase Price – $

9. Declarations

Each of the undersigned specifically represents to Lender and to Lender’s actual or potential agents, brokers, processors, attorneys, insurers, servicers, successors and assigns and agrees and acknowledges that: (1) the information provided in this application is true and correct as of the date set forth opposite my signature and that any intentional or negligent misrepresentation of this information contained in this application may result in civil liability, including monetary damages, to any person who may suffer any loss due to reliance upon any misrepresentation that I have made on this application, and/or in criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Sec. 1001, et seq.; (2) the Lender, its servicers, successors or assigns may retain the original and/or an electronic record of this application, whether or not the Loan is approved; (3) the Lender and its agents, brokers, insurers, servicers, successors, and assigns may continuously rely on the information contained in the application, and I am obligated to amend and/or supplement the information provided in this application if any of the material facts that I have represented herein should change prior to closing of the Loan; (4) in the event that my payments on the Loan become delinquent, the Lender, its servicers, successors or assigns may, in addition to any other rights and remedies that it may have relating to such delinquency, report my name and account information to one or more consumer reporting agencies; (5) ownership of the Loan and/or administration of the Loan account may be transferred with such notice as may be required by law; (6) and my transmission of this application as an “electronic record” containing my “electronic signature,” as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or my facsimile transmission of this application containing a facsimile of my signature, shall be as effective, enforceable and valid as if a paper version of this application were delivered containing my original written signature.

Acknowledgement. Each of the undersigned hereby acknowledges that any owner of the Loan, its servicers, successors and assigns, may verify or reverify any information contained in this application or obtain any information or data relating to the Loan, for any legitimate business purpose through any source, including a source named in this application or a consumer reporting agency.

10. Acknowledgement & Agreement

6

Borrower signature

6

Co-Borrower signatureDate Date

BORROWER NOTE: COMPLETE THIS SECTION ONLY IF THIS LOAN YOU ARE APPLYING FOR IS FOR A HOME EQUITY LOAN OR HOME EQUITY LINE OF CREDIT. DO NOT COMPLETE FOR NON DWELLING SECURED LOANS.

Demographic Information of Borrower

The purpose of collecting this information is to help ensure that all applicants are treated fairly and that the housing needs of communities and neighborhoods are being fulfilled. Federal law requires that we ask applicants for their demographic information (ethnicity, sex, and race) in order to monitor our compliance with equal credit opportunity, fair housing, and home mortgage disclosure laws. You are not required to provide this information, but are encouraged to do so. You may select one or more designations for “Ethnicity” and one or more designations for “Race.” The law provides that we may not discriminate on the basis of this information, or on whether you choose to provide it. However, if you choose not to provide the information and you have made this application in person, Federal regulations require us to note your ethnicity, sex, and race on the basis of visual observation or surname. The law also provides that we may not discriminate on the basis of age or marital status information you provide in this application. If you do not wish to provide some or all of this information, please check below.

Loan Originator’s Signature

Loan Originator’s Name (print or type)

Loan Originator’s Company’s Name

Republic First Bank d.b.a. Republic Bank

Loan Originator’s Identifier (NMLSR ID#)

REQUIRED FOR REAL ESTATE LOANS

Store

Loan Originator’s Phone Number (including area code)

1.888.875.2265

Date

Loan Origination Company’s Address

Two Liberty Place 50 South 16th Street, Suite 2400 Philadelphia, PA 19102

This Information was provided q In person (Face-to-Face) q Via fax, mail, the internet, email or hand delivered to bank employee

q In a telephone interview

Loan Originator’s Company Identifier (NMLSR ID#)

738460

11. Government Monitoring Information

12. To be completed by Loan Originator

Ethnicity: (Check one or more)

q Hispanic or Latino

Race: (Check one or more)

q American Indian or Alaska Native – Print name if enrolled or principal tribe:

Sex:

q Other Hispanic or Latino - Print Origin below:

q Mexican q Cuban q Puerto Rican

q Not Hispanic or Latino

For example: Argentinean, Colombian, Dominican, Nicaraguan, Salvadoran, Spaniard, and so on.

For example: Hmong, Laotian, Thai, Pakistani, Cambodian, and so on.

For example: Fijian, Tongan, and so on.

q Femaleq Male q I do not wish to provide this information

q Asian

q Native Hawaiian or other Pacific Islander

q Asian Indian

q White

q Native Hawaiian q Samoan

q Chinese q Filipino q Japanese

q I do not wish to provide this information

q Guamanian or Chamorro

q Korean q Vietnamese q Other Asian – Print race:

q Black or African American

q Other Pacific Islander – Print race:


Ethnicity: (Check one or more)

q Hispanic or Latino

Race: (Check one or more)

q American Indian or Alaska Native – Print name if enrolled or principal tribe:

Sex:

q Other Hispanic or Latino - Print Origin below:

q Mexican q Cuban q Puerto Rican

q Not Hispanic or Latino

For example: Argentinean, Colombian, Dominican, Nicaraguan, Salvadoran, Spaniard, and so on.

For example: Hmong, Laotian, Thai, Pakistani, Cambodian, and so on.

For example: Fijian, Tongan, and so on.

q Femaleq Male q I do not wish to provide this information

q Asian

q Native Hawaiian or other Pacific Islander

q Asian Indian

q White

q Native Hawaiian q Samoan

q Chinese q Filipino q Japanese


q Guamanian or Chamorro

q Korean q Vietnamese q Other Asian – Print race:

q Black or African American

q Other Pacific Islander – Print race:



107.1 06/19

EARLY ARM DISCLOSURE STATEMENT

Republic First Bank D/B/A Republic BankTwo Liberty Place

50 S. 16th Street, Suite 2400Philadelphia, PA 19102

ADJUSTABLE RATE MORTGAGE ("ARM")IMPORTANT MORTGAGE LOAN INFORMATION - PLEASE READ CAREFULLY

PROGRAM NAME: HOME EQUITY TERM LOAN PREFERRED RATE

If you wish to apply for an Adjustable Rate Mortgage loan (referred to in this disclosure as an "ARM") with Republic First Bank D/B/A Republic Bank (referred to in this disclosure as "we," "us," "our" or "Lender"), you should read the information below concerning the differences between this ARM program and other mortgage loan programs with which you may be familiar. This disclosure describes the features of the specific ARM that you are considering. Upon your request, we will provide you with information about any other Adjustable Rate Mortgage programs we offer.

GENERAL DESCRIPTION OF AN ADJUSTABLE RATE MORTGAGE LOAN. This loan is an Adjustable Rate Mortgage loan. Unlike most ARM programs, the initial underlying interest rate for this ARM program is a fixed rate with a preferred rate reduction and is not tied to an interest rate or formula. This preferred rate is subject to termination as described below in this disclosure. In the event of termination, the interest rate will increase. The interest rate increase will be reflected by increases in the amount of the payments. This ARM program is based on the terms and conditions set forth in this disclosure and in the loan documents. We have based this disclosure on recent interest rates and fees. Ask us for our current interest rate and margin for ARM programs.

You should read carefully this disclosure and the promissory note, deed of trust or mortgage, any riders and all other documents that you will be asked to sign if we offer an ARM to you and you accept it. This disclosure is not a contract or a loan commitment. However, the loan documents once signed will be a contract between you and us. The matters discussed in this disclosure are subject to change by us at any time without notice.

HOW YOUR INTEREST RATE IS DETERMINED. Your initial interest rate will be based on a fixed rate with a preferred rate reduction.

Interest Rate. Your initial interest rate on this loan will be specified at the time you receive a loan commitment or at the loan closing, and will be based on market conditions at that time. An interest rate of 5.49% per annum is representative of a fixed rate with a preferredrate reduction recently offered by us under this ARM program.

Interest Rate Adjustments. The interest rate under this ARM program is fixed throughout the term of the loan, subject to increase only upon occurrence of an event that would cause us to increase the interest rate as described below. However, under no circumstances willyour interest rate exceed 5.74% per annum at any time during the term of your loan.

Preferred Rate Reduction. Your interest rate includes a preferred rate reduction, and your interest rate may increase based on the occurrence of the following event:

Description of Event That Would Cause the Preferred Rate Reduction to Terminate: Termination of automatic payment account.

Rate Determination: Upon termination of your preferred rate reduction, the new interest rate for your loan will be determined in the following manner: Monthly rate will increase by .250%.

HOW YOUR PAYMENTS ARE DETERMINED. Your monthly payment of principal and interest will be determined based on the interest rate, loan term, and loan balance. If your interest rate changes, your payment will be adjusted to fully amortize the loan by the end of the loan term.

Frequency of Payment Changes. Your payment will not change except upon the occurrence of an event that would cause us to increasethe interest rate as described above.

112.2 05/18

Origination Co. NMLSR ID: 738460

HOME EQUITY LINE OF CREDIT



IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT

This disclosure contains important information about our Home Equity Line of Credit (the "Plan" or the “Credit Line”). You should read it carefully and keep a copy for your records.

AVAILABILITY OF TERMS. All of the terms of the Plan described herein are subject to change. If any of these terms change (other than the ANNUAL PERCENTAGE RATE) and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees that you paid to us or anyone else in connection with your application.

SECURITY INTEREST. We will take a security interest in your home. You could lose your home if you do not meet the obligations in your agreement with us.

POSSIBLE ACTIONS. Under this Plan, we have the following rights: We can terminate your account, require you to pay us the entire outstanding balance in one payment, and charge you certain fees if:

(a) You engage in fraud or material misrepresentation in connection with the Plan. (b) You do not meet the repayment terms of the Plan. (c) Your action or inaction adversely affects the collateral for the Plan or our rights in the collateral.

We can refuse to make additional extensions of credit or reduce your credit limit if:

(a) The value of the dwelling securing the Plan declines significantly below its appraised value for purposes of the Plan. (b) We reasonably believe you will not be able to meet the repayment requirements due to a material change in your financial circumstances. (c) You are in default of a material obligation of the Plan. (d) Government action prevents us from imposing the annual percentage rate provided for under the Plan or impairs our security interest such that the value of the interest is less than 120 percent of the credit line. (e) A government authority has notified us that continued advances would constitute an unsafe business practice. (f) The maximum annual percentage rate is reached.

The initial agreement permits us to make changes to the terms of the Plan at specified times or upon the occurrence of specified events.

Fees and Charges. In order to open and maintain an account, you must pay certain fees and charges.

Late Charge. Your payment will be late if it is not received by us within 15 days after the "Payment Due Date" shown on your periodic statement. If your payment is late we may charge you 5.000% of the unpaid amount of the payment or $15.00, whichever is less.

Third Party Fees. You must pay certain fees to third parties such as appraisers, credit reporting firms, and government agencies.

We also will pass on any third party charges as part of an annual review of your account, in amounts estimated to be similar to those disclosed below. These third party fees generally total between $74.50 and $6,867.75. Upon request, we will provide you with an itemization of the fees you will have to pay to third parties.

PROPERTY INSURANCE. You must carry insurance on the property that secures the Plan.

MINIMUM PAYMENT REQUIREMENTS. You can obtain advances of credit during the following period: You may obtain credit advances for one hundred eighty (180) months (the "Draw Period"). After the Draw Period ends, the repayment period will begin. You will no longer be able to obtain credit advances. The length of the repayment period is as follows: one hundred eighty (180) months. Your Regular Payment will be based on a percentage of your outstanding balance plus all accrued FINANCE CHARGES as shown below. (”First Payment Stream”). Your payments will be due monthly.

Range of Balances Number of Payments Regular Payment Calculation

All Balances 180 0.556% of your outstanding balance plus all accrued FINANCE CHARGES

Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment.

After completion of the First Payment Stream, your Regular Payment will be based on a percentage of your outstanding balance plus all accrued FINANCE CHARGES as shown below (”Second Payment Stream”). Your payments will be due monthly.

Range of Balances Number of Payments Regular Payment Calculation

All Balances 180 0.556% of your outstanding balance plus all accrued FINANCE CHARGES

Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. The Minimum Payment will not fully repay the principal that is outstanding on your Credit Line and your final payment will be a single balloon payment. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment.

In any event, if your Credit Line balance falls below $1.00, you agree to pay your balance in full.

MINIMUM PAYMENT EXAMPLE. If you made only the minimum payment and took no other credit advances, it would take 30 years to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 7.490%. During that period, you would make 180 monthly payments ranging from $43.43 to $119.21. Then you would make 179 monthly payments ranging from $13.41 to $36.72 and one final payment of $1,357.21.

TRANSACTION REQUIREMENTS. The following transaction limitations will apply to the use of your Credit Line:

Online Banking Limitations. The following transaction limitations will apply to your Credit Line and accessing by other methods. Other Transaction Requirements. You must be enrolled in our online banking system to initiate credit advances through online banking. Credit advances initiated by you through our online banking system may only be applied (transferred) to your designated deposit account with us. Credit Line HELOC Check, In Person Request, Telephone Request and Request By Mail Limitations. There are no transaction limitations for the writing of HELOC Checks, requesting an advance in person, requesting an advance by telephone or requesting an advance by mail.

TAX DEDUCTIBILITY. You should consult a tax advisor regarding the deductibility of interest and charges for the Plan.

ADDITIONAL HOME EQUITY PROGRAMS. Please ask us about our other available Home Equity Line of Credit plans.

VARIABLE RATE FEATURE. The Plan has a variable rate feature. The ANNUAL PERCENTAGE RATE (corresponding to the periodic rate), and the minimum payment amount can change as a result. The ANNUAL PERCENTAGE RATE does not include costs other than interest.

THE INDEX. The annual percentage rate is based on the value of an index (referred to in this disclosure as the "Index"). The Index is the prime rate as published from time to time in the Wall Street Journal. Information about the Index is available or published in the Wall Street Journal. We will use the most recent Index value available to us as of the day of the rate change or any annual percentage rate adjustment. If the Index is no longer available, we will choose a new Index and margin. The new Index will have an historical movement substantially similar to the original Index, and the new Index and margin will result in an annual percentage rate that is substantially similar to the rate in effect at the time the original Index becomes unavailable.

ANNUAL PERCENTAGE RATE. To determine the Periodic Rate that will apply to your First Payment Stream, we add a margin to the value of the Index, round that sum up to the nearest 0.001%, then divide the rounded value by 365 days. To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (366 during leap years). This result is the ANNUAL PERCENTAGE RATE for your First Payment Stream. To determine the Periodic Rate that will apply to your Second Payment Stream, we add a margin to the value of the index, round that sum up to the nearest 0.001%, then divide the rounded value by 365 days. To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (366 during leap years). This result is the ANNUAL PERCENTAGE RATE for your Second Payment Stream. A change in the index rate generally will result in a change in the ANNUAL PERCENTAGE RATE. The amount that your ANNUAL PERCENTAGE RATE may change may be affected by the lifetime annual percentage rate limits, as discussed below.

Please ask us for the current Index value, margin and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you.

FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS. Your ANNUAL PERCENTAGE RATE can change daily. There is no limit on the amount by which the annual percentage rate can change during any one year period. However, under no circumstances will your ANNUAL PERCENTAGE RATE exceed 18.000% per annum or, go below 3.500% per annum at any time during the term of the Plan.

MAXIMUM RATE AND PAYMENT EXAMPLE. Draw Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.000% would

be $208.48. This ANNUAL PERCENTAGE RATE could be reached at the time of the 1st payment.

Repayment Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $208.48. This ANNUAL PERCENTAGE RATE could be reached at the time of the 1st payment during the repayment period.

PREPAYMENT. You may prepay all or any amount owing under the Plan at any time without penalty.

HISTORICAL EXAMPLE. The example below shows how the ANNUAL PERCENTAGE RATE and the minimum payments for a single $10,000.00 credit advance would have changed based on changes in the Index from 2004 to 2018. The Index values are from the following reference period: the first business day of December. While only one payment per year is shown, payments may have varied during each year. Different outstanding principal balances could result in different payment amounts.

The table assumes that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during the year. It does not necessarily indicate how the Index or your payments would change in the future.

CREDIT LINE TERMINATION FEE. lf you terminate your Credit Line within the first twelve (12) months of the Agreement Date, you will be required to pay an Early Termination Fee of one (1) percent of the credit limit, not to exceed $250.00 to us. In the event you refinance this Credit Line by obtaining a new loan through us, we will not charge this fee. You may prepay all or any amount outstanding on your Credit Line at any time without incurring the Early Termination Fee, provided you do not request the termination of your Credit Line within the first twelve (12) months of the Agreement Date.

INDEX TABLE

Year (the first business day of December) Index Margin (1) ANNUAL Monthly (Percent) (Percent) PERCENTAGE Payment RATE (Dollars)

2004.................................................................................. 5.000 2.240 7.240 117.09 2005.................................................................................. 7.000 2.240 9.240 125.40 2006.................................................................................. 8.250 2.240 10.490 126.57 2007.................................................................................. 7.500 2.240 9.740 113.17 2008.................................................................................. 4.000 2.240 6.240 83.10 2009.................................................................................. 3.250 2.240 5.490 73.16 2010.................................................................................. 3.250 2.240 5.490 68.43 2011.................................................................................. 3.250 2.240 5.490 64.00 2012.................................................................................. 3.250 2.240 5.490 59.86 2013.................................................................................. 3.250 2.240 5.490 55.98 2014.................................................................................. 3.250 2.240 5.490 52.36 2015.................................................................................. 3.250 2.240 5.490 48.97 2016.................................................................................. 3.500 2.240 5.740 46.75 2017.................................................................................. 4.250 2.240 6.490 46.40 2018.................................................................................. 5.250 2.240 7.490 46.72

(1) This is a margin we have used recently; your margin may be different.

108.1 12/18

HOME EQUITY LINE OF CREDIT(Continued)

Rev. June 2019 Page 1 of 1

REPUBLIC FIRST BANK DBA REPUBLIC BANK (“REPUBLIC BANK”) DISCLOSURES REQUIRED UNDER THE LAWS OF THE STATE OF NEW YORK

NEW YORK PRE-APPLICATION DISCLOSURE AND FEE AGREEMENT

FOR OUR HOME EQUITY LINE OF CREDIT

This disclosure provides you with important information regarding your mortgage application pursuant to 3 NCYRR §38.3(b).

1. Fee Disclosure: You understand that you are not required to pay any fees to Republic Bank at the time of application.

2. Prepayment Penalty: The loan product for which you applied may impose a prepayment penalty. The terms and amount of, or formula for calculating, the prepayment penalty, if applicable, will be disclosed to you as soon as it is known, but no later than the time of commitment.

3. You Can Call Us or Write Us: If you have questions, comments or complaints concerning your application, call 1.888.875.2265 or write us at 50 S. 16th Street, Suite 2400, Philadelphia, PA 19102.

4. Interest Rate Set Date (3 NYCRR § 38.3(d)): The interest rate for this mortgage loan will be set on the date on which you submit a completed loan application to Republic Bank.

5. Agreement: You and we agree to be bound by all provisions of this Agreement. Also, you acknowledge that you received a completed copy of this Agreement before paying any money in connection with your loan.

DISCLOSURE APPLICABLE TO BALLOON PAYMENT MORTGAGE LOANS ONLY

THE TERM OF THE LOAN IS 30 YEARS. AS A RESULT, YOU WILL BE REQUIRED TO REPAY THE ENTIRE PRINCIPAL BALANCE AND ANY ACCRUED INTEREST THEN OWING 30 YEARS FROM THE DATE ON WHICH THE LOAN IS MADE. THE LENDER HAS NO OBLIGATION TO REFINANCE THIS LOAN AT THE END OF ITS TERM. THEREFORE, YOU MAY BE REQUIRED TO REPAY THE LOAN OUT OF ASSETS YOU OWN OR YOU MAY HAVE TO FIND ANOTHER LENDER WILLING TO REFINANCE THE LOAN. ASSUMING THIS LENDER OR ANOTHER LENDER REFINANCES THIS LOAN AT MATURITY, YOU WILL PROBABLY BE CHARGED INTEREST AT MARKET RATES PREVAILING AT THAT TIME AND SUCH RATES MAY BE HIGHER THAN THE INTEREST RATE PAID ON THIS LOAN. YOU MAY ALSO HAVE TO PAY SOME FOR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW MORTGAGE LOAN. See 3 NYCRR § 82.6

5 YEAR INTEREST ONLY HOME EQUITY LINE OF CREDIT



IMPORTANT TERMS OF OUR 5 YEAR INTEREST ONLY HOME EQUITY LINE OF CREDIT

This disclosure contains important information about our 5 Year Interest Only Home Equity Line of Credit (the "Plan" or the “Credit Line”). You should read it carefully and keep a copy for your records.






(a) The value of the dwelling securing the Plan declines significantly below its appraised value for purposes of the Plan. (b) We reasonably believe you will not be able to meet the repayment requirements due to a material change in your

financial circumstances. (c) You are in default of a material obligation of the Plan. (d) Government action prevents us from imposing the annual percentage rate provided for under the Plan or impairs our

security interest such that the value of the interest is less than 120 percent of the credit line. (e) A government authority has notified us that continued advances would constitute an unsafe business practice. (f) The maximum annual percentage rate is reached.







MINIMUM PAYMENT REQUIREMENTS. You can obtain advances of credit during the following period: sixty (60) months (the "Draw Period"). After the Draw Period ends, the repayment period will begin. You will no longer be able to obtain credit advances. The length of the repayment period is as follows: one hundred eighty (180) months. Your Regular Payment will equal the amount of your accrued FINANCE CHARGES ("First Payment Stream"). Your payments will be due monthly. Your First Payment Stream will last for the first 60 months. Your "MinimumPayment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment. The Minimum Payment during the First Payment Stream will not reduce the principal that is outstanding on your Credit Line.

After completion of the First Payment Stream, your Regular Payment will be based on a percentage of your outstanding balance plus all accrued FINANCE CHARGES as shown below ("Second Payment Stream"). Your payments will be due monthly.

Range of Balances Number of Payments Regular Payment Calculation All Balances 180 0.556% of your outstanding balance plus all accrued FINANCE CHARGES

Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment. The Minimum Payment will not fully repay the principal that is outstanding on your Credit Line and your final payment will be a single balloon payment.




Online Banking Limitations. The following transaction limitations will apply to your Credit Line and accessing by other methods.

Other Transaction Requirements. You must be enrolled in our online banking system to initiate credit advances through online banking. Credit advances initiated by you through our online banking system may only be applied (transferred) to your designated deposit account with us.

Credit Line HELOC Check, Telephone Request, Request by Mail and In Person Request Limitations. There are no transaction limitations for the writing of HELOC Checks, requesting an advance by telephone, requesting an advance by mail or requesting an advance in person.





ANNUAL PERCENTAGE RATE. To determine the Periodic Rate that will apply to your First Payment Stream, we add a margin to the value of the Index, round that sum up to the nearest 0.001%, then divide the rounded value by 365 days. To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (366 during leap years). This result is the ANNUAL PERCENTAGE RATE for your First Payment Stream. To determine the Periodic Rate that will apply to your Second Payment Stream, we add a margin to the value of the Index, round that sum up to the nearest 0.001%, then divide the rounded value by 365 days. To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (366 during leap years). This result is the ANNUAL PERCENTAGE RATE for your SecondPayment Stream. A change in the Index rate generally will result in a change in the ANNUAL PERCENTAGE RATE. The amount that your ANNUAL PERCENTAGE RATE may change also may be affected by the lifetime annual percentage rate limits, as discussed below.

Please ask us for the current Index value, margin and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you


MAXIMUM RATE AND PAYMENT EXAMPLE.

Draw Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $152.88. This ANNUAL PERCENTAGE RATE could be reached at the time of the 1st payment.





5 YEAR INTEREST ONLY HOME EQUITY LINE OF CREDIT



IMPORTANT TERMS OF OUR 5 YEAR INTEREST ONLY HOME EQUITY LINE OF CREDIT

This disclosure contains important information about our 5 Year Interest Only Home Equity Line of Credit (the "Plan" or the “Credit Line”). You should read it carefully and keep a copy for your records.






(a) The value of the dwelling securing the Plan declines significantly below its appraised value for purposes of the Plan. (b) We reasonably believe you will not be able to meet the repayment requirements due to a material change in your

financial circumstances. (c) You are in default of a material obligation of the Plan. (d) Government action prevents us from imposing the annual percentage rate provided for under the Plan or impairs our

security interest such that the value of the interest is less than 120 percent of the credit line. (e) A government authority has notified us that continued advances would constitute an unsafe business practice. (f) The maximum annual percentage rate is reached.







MINIMUM PAYMENT REQUIREMENTS. You can obtain advances of credit during the following period: sixty (60) months (the "Draw Period"). After the Draw Period ends, the repayment period will begin. You will no longer be able to obtain credit advances. The length of the repayment period is as follows: one hundred eighty (180) months. Your Regular Payment will equal the amount of your accrued FINANCE CHARGES ("First Payment Stream"). Your payments will be due monthly. Your First Payment Stream will last for the first 60 months. Your "MinimumPayment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment. The Minimum Payment during the First Payment Stream will not reduce the principal that is outstanding on your Credit Line.

After completion of the First Payment Stream, your Regular Payment will be based on a percentage of your outstanding balance plus all accrued FINANCE CHARGES as shown below ("Second Payment Stream"). Your payments will be due monthly.

Range of Balances Number of Payments Regular Payment Calculation All Balances 180 0.556% of your outstanding balance plus all accrued FINANCE CHARGES

Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment. The Minimum Payment will not fully repay the principal that is outstanding on your Credit Line and your final payment will be a single balloon payment.




Online Banking Limitations. The following transaction limitations will apply to your Credit Line and accessing by other methods.

Other Transaction Requirements. You must be enrolled in our online banking system to initiate credit advances through online banking. Credit advances initiated by you through our online banking system may only be applied (transferred) to your designated deposit account with us.

Credit Line HELOC Check, Telephone Request, Request by Mail and In Person Request Limitations. There are no transaction limitations for the writing of HELOC Checks, requesting an advance by telephone, requesting an advance by mail or requesting an advance in person.





ANNUAL PERCENTAGE RATE. To determine the Periodic Rate that will apply to your First Payment Stream, we add a margin to the value of the Index, round that sum up to the nearest 0.001%, then divide the rounded value by 365 days. To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (366 during leap years). This result is the ANNUAL PERCENTAGE RATE for your First Payment Stream. To determine the Periodic Rate that will apply to your Second Payment Stream, we add a margin to the value of the Index, round that sum up to the nearest 0.001%, then divide the rounded value by 365 days. To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (366 during leap years). This result is the ANNUAL PERCENTAGE RATE for your SecondPayment Stream. A change in the Index rate generally will result in a change in the ANNUAL PERCENTAGE RATE. The amount that your ANNUAL PERCENTAGE RATE may change also may be affected by the lifetime annual percentage rate limits, as discussed below.

Please ask us for the current Index value, margin and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you


MAXIMUM RATE AND PAYMENT EXAMPLE.

Draw Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $152.88. This ANNUAL PERCENTAGE RATE could be reached at the time of the 1st payment.





CREDIT LINE TERMINATION FEE. lf you terminate your Credit Line within the first twelve (12) months of the Agreement Date, you will be required to pay an Early Termination Fee of one (1) percent of the credit limit, not to exceed $250.00 to us. In the event you refinance this Credit Line by obtaining a new loan through us, we will not charge this fee. You may prepay all or any amount outstanding on your Credit Line at any time without incurring the Early Termination Fee, provided you do not request the termination of your Credit Line within the first twelve (12) months of the Agreement Date.

INDEX TABLE

Year (the first business day of December) Index Margin (1) ANNUAL Monthly (Percent) (Percent) PERCENTAGE Payment RATE (Dollars)

2004.................................................................................. 5.000 2.240 7.740 61.49 2005.................................................................................. 7.000 2.240 9.240 78.48 2006.................................................................................. 8.250 2.240 10.490 89.09 2007.................................................................................. 7.500 2.240 9.740 82.72 2008.................................................................................. 4.000 2.240 6.240 53.00

2009.................................................................................. 3.250 2.240 5.490 102.23 2010.................................................................................. 3.250 2.240 5.490 95.61 2011.................................................................................. 3.250 2.240 5.490 89.43 2012.................................................................................. 3.250 2.240 5.490 83.64 2013.................................................................................. 3.250 2.240 5.490 78.23 2014.................................................................................. 3.250 2.240 5.490 73.16 2015.................................................................................. 3.250 2.240 5.490 68.43 2016.................................................................................. 3.250 2.240 5.740 65.33 2017.................................................................................. 4.250 2.240 6.490 64.83 2018.................................................................................. 5.250 2.240 7.490 65.29

(1) This is a margin we have used recently; your margin may be different.

DrawPeriod

RepaymentPeriod

5 YEAR INTEREST ONLY HOME EQUITY LINE OF CREDIT(Continued)

111.1 12/18

Rev. June 2019 Page 1 of 1

REPUBLIC FIRST BANK DBA REPUBLIC BANK (“REPUBLIC BANK”) DISCLOSURES REQUIRED UNDER THE LAWS OF THE STATE OF NEW YORK

NEW YORK PRE-APPLICATION DISCLOSURE AND FEE AGREEMENT

FOR OUR 5 YEAR INTEREST ONLY HOME EQUITY LINE OF CREDIT

This disclosure provides you with important information regarding your mortgage application pursuant to 3 NCYRR §38.3(b).

1. Fee Disclosure: You understand that you are not required to pay any fees to Republic Bank at the time of application.

2. Prepayment Penalty: The loan product for which you applied may impose a prepayment penalty. The terms and amount of, or formula for calculating, the prepayment penalty, if applicable, will be disclosed to you as soon as it is known, but no later than the time of commitment.

3. You Can Call Us or Write Us: If you have questions, comments or complaints concerning your application, call 1.888.875.2265 or write us at 50 S. 16th Street, Suite 2400, Philadelphia, PA 19102.

4. Interest Rate Set Date (3 NYCRR § 38.3(d)): The interest rate for this mortgage loan will be set on the date on which you submit a completed loan application to Republic Bank.

5. Agreement: You and we agree to be bound by all provisions of this Agreement. Also, you acknowledge that you received a completed copy of this Agreement before paying any money in connection with your loan.

DISCLOSURE APPLICABLE TO BALLOON PAYMENT MORTGAGE LOANS ONLY

THE TERM OF THE LOAN IS 20 YEARS. AS A RESULT, YOU WILL BE REQUIRED TO REPAY THE ENTIRE PRINCIPAL BALANCE AND ANY ACCRUED INTEREST THEN OWING 20 YEARS FROM THE DATE ON WHICH THE LOAN IS MADE. THE LENDER HAS NO OBLIGATION TO REFINANCE THIS LOAN AT THE END OF ITS TERM. THEREFORE, YOU MAY BE REQUIRED TO REPAY THE LOAN OUT OF ASSETS YOU OWN OR YOU MAY HAVE TO FIND ANOTHER LENDER WILLING TO REFINANCE THE LOAN. ASSUMING THIS LENDER OR ANOTHER LENDER REFINANCES THIS LOAN AT MATURITY, YOU WILL PROBABLY BE CHARGED INTEREST AT MARKET RATES PREVAILING AT THAT TIME AND SUCH RATES MAY BE HIGHER THAN THE INTEREST RATE PAID ON THIS LOAN. YOU MAY ALSO HAVE TO PAY SOME FOR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW MORTGAGE LOAN. See 3 NYCRR § 82.6

January 2014

What you should know about home equity lines of credit

2 WHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT

This booklet was initially prepared by the Board of Governors of the Federal Reserve System. The

Consumer Financial Protection Bureau (CFPB) has made technical updates to the booklet to

reflect new mortgage rules under Title XIV of the Dodd-Frank Wall Street Reform and

Consumer Protection Act (Dodd-Frank Act). A larger update of this booklet is planned in the

future to reflect other changes under the Dodd-Frank Act and to align with other CFPB

resources and tools for consumers as part of the CFPB’s broader mission to educate consumers.

Consumers are encouraged to visit the CPFB’s website at consumerfinance.gov/owning-a-

home to access interactive tools and resources for mortgage shoppers, which are expected to be

available beginning in 2014.

http://www.consumerfinance.gov/owning-a-home/


Table of contents Table of contents......................................................................................................... 3

1. Introduction ........................................................................................................... 4

1.1 Home equity plan checklist ...................................................................... 4

2. What is a home equity line of credit? ................................................................. 6

2.1 What should you look for when shopping for a plan? ............................. 7

2.2 Costs of establishing and maintaining a home equity line ...................... 8

2.3 How will you repay your home equity plan? ............................................ 9

2.4 Line of credit vs. traditional second mortgage loans ............................. 10

2.5 What if the lender freezes or reduces your line of credit? ...................... 11

Appendix A: ............................................................................................................... 12

Defined terms .................................................................................................. 12

Appendix B: ............................................................................................................... 15

More information .............................................................................................15

Appendix C: ............................................................................................................... 16

Contact information ........................................................................................ 16


1. Introduction If you are in the market for credit, a home equity plan is one of several options that might be

right for you. Before making a decision, however, you should weigh carefully the costs of a home

equity line against the benefits. Shop for the credit terms that best meet your borrowing needs

without posing undue financial risks. And remember, failure to repay the amounts you’ve

borrowed, plus interest, could mean the loss of your home.

1.1 Home equity plan checklist

Ask your lender to help you fill out this worksheet.

Basic features for comparison Plan A Plan B

Fixed annual percentage rate % %

Variable annual percentage rate % %

Index used and current value % %

Amount of margin

Frequency of rate adjustments

Amount/length of discount (if any)

Interest rate cap and floor

Length of plan

Draw period


Basic features for comparison (continued) Plan A Plan B

Repayment period

Initial fees

Appraisal fee

Application fee

Up-front charges, including points

Closing costs

Repayment terms

During the draw period

Interest and principal payments

Interest-only payments

Fully amortizing payments

When the draw period ends

Balloon payment?

Renewal available?

Refinancing of balance by lender?


2. What is a home equity line of credit?

A home equity line of credit is a form of revolving credit in which your home serves as collateral.

Because a home often is a consumer’s most valuable asset, many homeowners use home equity

credit lines only for major items, such as education, home improvements, or medical bills, and

choose not to use them for day-to-day expenses.

With a home equity line, you will be approved for a specific amount of credit. Many lenders set

the credit limit on a home equity line by taking a percentage (say, 75 percent) of the home’s

appraised value and subtracting from that the balance owed on the existing mortgage. For

example:

In determining your actual credit limit, the lender will also consider your ability to repay the

loan (principal and interest) by looking at your income, debts, and other financial obligations as

well as your credit history.

Many home equity plans set a fixed period during which you can borrow money, such as 10

years. At the end of this “draw period,” you may be allowed to renew the credit line. If your plan

Appraised value of home $100,000

Percentage x 75%

Percentage of appraised value = $75,000

Less balance owed on mortgage – $40,000

Potential line of credit $35,000


does not allow renewals, you will not be able to borrow additional money once the period has

ended. Some plans may call for payment in full of any outstanding balance at the end of the

period. Others may allow repayment over a fixed period (the “repayment period”), for example,

10 years.

Once approved for a home equity line of credit, you will most likely be able to borrow up to your

credit limit whenever you want. Typically, you will use special checks to draw on your line.

Under some plans, borrowers can use a credit card or other means to draw on the line.

There may be other limitations on how you use the line. Some plans may require you to borrow

a minimum amount each time you draw on the line (for example, $300) or keep a minimum

amount outstanding. Some plans may also require that you take an initial advance when the line

is set up.

2.1 What should you look for when shopping for a plan?

If you decide to apply for a home equity line of credit, look for the plan that best meets your

particular needs. Read the credit agreement carefully, and examine the terms and conditions of

various plans, including the annual percentage rate (APR) and the costs of establishing the plan.

Remember, though, that the APR for a home equity line is based on the interest rate alone and

will not reflect closing costs and other fees and charges, so you’ll need to compare these costs, as

well as the APRs, among lenders.

2.1.1 Variable interest rates

Home equity lines of credit typically involve variable rather than fixed interest rates. The

variable rate must be based on a publicly available index (such as the prime rate published in

some major daily newspapers or a U.S. Treasury bill rate). In such cases, the interest rate you pay

for the line of credit will change, mirroring changes in the value of the index. Most lenders cite

the interest rate you will pay as the value of the index at a particular time, plus a “margin,” such

as 2 percentage points. Because the cost of borrowing is tied directly to the value of the index, it

is important to find out which index is used, how often the value of the index changes, and how

high it has risen in the past. It is also important to note the amount of the margin.


Lenders sometimes offer a temporarily discounted interest rate for home equity lines—an

“introductory” rate that is unusually low for a short period, such as six months.

Variable-rate plans secured by a dwelling must, by law, have a ceiling (or cap) on how much your

interest rate may increase over the life of the plan. Some variable-rate plans limit how much your

payment may increase and how low your interest rate may fall if the index drops.

Some lenders allow you to convert from a variable interest rate to a fixed rate during the life of

the plan, or let you convert all or a portion of your line to a fixed-term installment loan.

2.2 Costs of establishing and maintaining a home equity line

Many of the costs of setting up a home equity line of credit are similar to those you pay when

you get a mortgage. For example:

A fee for a property appraisal to estimate the value of your home;

An application fee, which may not be refunded if you are turned down for credit;

Up-front charges, such as one or more “points” (one point equals 1 percent of the credit

limit); and

Closing costs, including fees for attorneys, title search, mortgage preparation and filing,

property and title insurance, and taxes.

In addition, you may be subject to certain fees during the plan period, such as annual

membership or maintenance fees and a transaction fee every time you draw on the credit line.

You could find yourself paying hundreds of dollars to establish the plan. And if you were to draw

only a small amount against your credit line, those initial charges would substantially increase

the cost of the funds borrowed. On the other hand, because the lender’s risk is lower than for

other forms of credit, as your home serves as collateral, annual percentage rates for home equity

lines are generally lower than rates for other types of credit. The interest you save could offset

the costs of establishing and maintaining the line. Moreover, some lenders waive some or all of

the closing costs.


2.3 How will you repay your home equity plan?

Before entering into a plan, consider how you will pay back the money you borrow. Some plans

set a minimum monthly payment that includes a portion of the principal (the amount you

borrow) plus accrued interest. But, unlike with typical installment loan agreements, the portion

of your payment that goes toward principal may not be enough to repay the principal by the end

of the term. Other plans may allow payment of only the interest during the life of the plan, which

means that you pay nothing toward the principal. If you borrow $10,000, you will owe that

amount when the payment plan ends.

Regardless of the minimum required payment on your home equity line, you may choose to pay

more, and many lenders offer a choice of payment options. However, some lenders may require

you to pay special fees or penalties if you choose to pay more, so check with your lender. Many

consumers choose to pay down the principal regularly as they do with other loans. For example,

if you use your line to buy a boat, you may want to pay it off as you would a typical boat loan.

Whatever your payment arrangements during the life of the plan—whether you pay some, a

little, or none of the principal amount of the loan—when the plan ends, you may have to pay the

entire balance owed, all at once. You must be prepared to make this “balloon payment” by

refinancing it with the lender, by obtaining a loan from another lender, or by some other means.

If you are unable to make the balloon payment, you could lose your home.

If your plan has a variable interest rate, your monthly payments may change. Assume, for

example, that you borrow $10,000 under a plan that calls for interest-only payments. At a 10

percent interest rate, your monthly payments would be $83. If the rate rises over time to 15

percent, your monthly payments will increase to $125. Similarly, if you are making payments

that cover interest plus some portion of the principal, your monthly payments may increase,

unless your agreement calls for keeping payments the same throughout the plan period.

If you sell your home, you will probably be required to pay off your home equity line in full

immediately. If you are likely to sell your home in the near future, consider whether it makes

sense to pay the up-front costs of setting up a line of credit. Also keep in mind that renting your

home may be prohibited under the terms of your agreement.


2.4 Line of credit vs. traditional second mortgage loans

If you are thinking about a home equity line of credit, you might also want to consider a

traditional second mortgage loan. This type of loan provides you with a fixed amount of money,

repayable over a fixed period. In most cases, the payment schedule calls for equal payments that

pay off the entire loan within the loan period. You might consider a second mortgage instead of a

home equity line if, for example, you need a set amount for a specific purpose, such as an

addition to your home.

In deciding which type of loan best suits your needs, consider the costs under the two

alternatives. Look at both the APR and other charges. Do not, however, simply compare the

APRs, because the APRs on the two types of loans are figured differently:

The APR for a traditional second mortgage loan takes into account the interest rate

charged plus points and other finance charges.

The APR for a home equity line of credit is based on the periodic interest rate alone. It

does not include points or other charges.

2.4.1 Disclosures from lenders

The federal Truth in Lending Act requires lenders to disclose the important terms and costs of

their home equity plans, including the APR, miscellaneous charges, the payment terms, and

information about any variable-rate feature. And in general, neither the lender nor anyone else

may charge a fee until after you have received this information. You usually get these disclosures

when you receive an application form, and you will get additional disclosures before the plan is

opened. If any term (other than a variable-rate feature) changes before the plan is opened, the

lender must return all fees if you decide not to enter into the plan because of the change.

Lenders are also required to provide you with a list of homeownership counseling organizations

in your area.

When you open a home equity line, the transaction puts your home at risk. If the home involved

is your principal dwelling, the Truth in Lending Act gives you three days from the day the

account was opened to cancel the credit line. This right allows you to change your mind for any

reason. You simply inform the lender in writing within the three-day period. The lender must


then cancel its security interest in your home and return all fees— including any application and

appraisal fees—paid to open the account.

The Home Ownership and Equity Protection Act of 1994 (HOEPA) addresses certain unfair

practices and establishes requirements for certain loans with high rates and fees, including

certain additional disclosures. HOEPA now covers some HELOCs. You can find out more

information by contacting the CFPB at the website address and phone number listed in the

Contact information appendix, below.

2.5 What if the lender freezes or reduces your line of credit?

Plans generally permit lenders to freeze or reduce a credit line if the value of the home “declines

significantly” or when the lender “reasonably believes” that you will be unable to make your

payments due to a “material change” in your financial circumstances. If this happens, you may

want to:

Talk with your lender. Find out what caused the lender to freeze or reduce your credit

line and what, if anything, you can do to restore it. You may be able to provide additional

information to restore your line of credit, such as documentation showing that your

house has retained its value or that there has not been a “material change” in your

financial circumstances. You may want to get copies of your credit reports (go to the

CFPB’s website at consumerfinance.gov/askcfpb/5/can-i-review-my-credit-report.html

for information about how to get free copies of your credit reports) to make sure all the

information in them is correct. If your lender suggests getting a new appraisal, be sure

you discuss appraisal firms in advance so that you know they will accept the new

appraisal as valid.

Shop around for another line of credit. If your lender does not want to restore

your line of credit, shop around to see what other lenders have to offer. If another lender

is willing to offer you a line of credit, you may be able to pay off your original line of

credit and take out another one. Keep in mind, however, that you may need to pay some

of the same application fees you paid for your original line of credit.

http://www.consumerfinance.gov/askcfpb/5/can-i-review-my-credit-report.html


APPENDIX A:

Defined terms This glossary provides general definitions for terms commonly used in the real estate market.

They may have different legal meanings depending on the context.

DEFINED TERM

ANNUAL

MEMBERSHIP OR

MAINTENANCE FEE

An annual charge for access to a financial product such as a line of credit,

credit card, or account. The fee is charged regardless of whether or not

the product is used.

ANNUAL

PERCENTAGE RATE

(APR)

The cost of credit, expressed as a yearly rate. For closed-end credit, such

as car loans or mortgages, the APR includes the interest rate, points,

broker fees, and other credit charges that the borrower is required to pay.

An APR, or an equivalent rate, is not used in leasing agreements.

APPLICATION FEE Fees charged when you apply for a loan or other credit. These fees may

include charges for property appraisal and a credit report.

BALLOON PAYMENT A large extra payment that may be charged at the end of a mortgage loan

or lease.

CAP (INTEREST

RATE)

A limit on the amount that your interest rate can increase. Two types of

interest-rate caps exist. Periodic adjustment caps limit the interest-rate

increase from one adjustment period to the next. Lifetime caps limit the

interest-rate increase over the life of the loan. By law, all adjustable-rate

mortgages have an overall cap.


CLOSING OR

SETTLEMENT COSTS

Fees paid when you close (or settle) on a loan. These fees may include

application fees; title examination, abstract of title, title insurance, and

property survey fees; fees for preparing deeds, mortgages, and

settlement documents; attorneys’ fees; recording fees; estimated costs of

taxes and insurance; and notary, appraisal, and credit report fees. Under

the Real Estate Settlement Procedures Act, the borrower receives a good

faith estimate of closing costs within three days of application. The good

faith estimate lists each expected cost as an amount or a range.

CREDIT LIMIT The maximum amount that may be borrowed on a credit card or under a

home equity line of credit plan.

EQUITY

The difference between the fair market value of the home and the

outstanding balance on your mortgage plus any outstanding home equity

loans.

INDEX

The economic indicator used to calculate interest-rate adjustments for

adjustable-rate mortgages or other adjustable-rate loans. The index rate

can increase or decrease at any time. See also Selected index rates for

ARMs over an 11-year period

(consumerfinance.gov/f/201204_CFPB_ARMs-brochure.pdf) for

examples of common indexes that have changed in the past.

INTEREST RATE

The percentage rate used to determine the cost of borrowing money,

stated usually as a percentage of the principal loan amount and as an

annual rate.

MARGIN The number of percentage points the lender adds to the index rate to

calculate the adjustable-rate-mortgage interest rate at each adjustment.

MINIMUM PAYMENT

The lowest amount that you must pay (usually monthly) to keep your

account in good standing. Under some plans, the minimum payment may

cover interest only; under others, it may include both principal and

interest.

http://files.consumerfinance.gov/f/201204_CFPB_ARMs-brochure.pdf


POINTS (ALSO

CALLED DISCOUNT

POINTS)

One point is equal to 1 percent of the principal amount of a mortgage

loan. For example, if a mortgage is $200,000, one point equals $2,000.

Lenders frequently charge points in both fixed-rate and adjustable-rate

mortgages to cover loan origination costs or to provide additional

compensation to the lender or broker. These points usually are paid at

closing and may be paid by the borrower or the home seller, or may be

split between them. In some cases, the money needed to pay points can

be borrowed (incorporated in the loan amount), but doing so will increase

the loan amount and the total costs. Discount points (also called discount

fees) are points that you voluntarily choose to pay in return for a lower

interest rate.

SECURITY INTEREST

If stated in your credit agreement, a creditor, lessor, or assignee’s legal

right to your property (such as your home, stocks, or bonds) that secures

payment of your obligation under the credit agreement. The property that

secures payment of your obligation is referred to as “collateral.”

TRANSACTION FEE

Fee charged each time a withdrawal or other specified transaction is

made on a line of credit, such as a balance transfer fee or a cash advance

fee.

VARIABLE RATE An interest rate that changes periodically in relation to an index, such as

the prime rate. Payments may increase or decrease accordingly.


APPENDIX B:

More information For more information about mortgages, including home equity lines of credit, visit

consumerfinance.gov/mortgage. For answers to questions about mortgages and other financial

topics, visit consumerfinance.gov/askcfpb. You may also visit the CFPB’s website at

consumerfinance.gov/owning-a-home to access interactive tools and resources for mortgage

shoppers, which are expected to be available beginning in 2014.

Housing counselors can be very helpful, especially for first-time home buyers or if you’re having

trouble paying your mortgage. The U.S. Department of Housing and Urban Development (HUD)

supports housing counseling agencies throughout the country that can provide free or low-cost

advice. You can search for HUD-approved housing counseling agencies in your area on the

CFPB’s web site at consumerfinance.gov/find-a-housing-counselor or by calling HUD’s

interactive toll-free number at 800-569-4287.

The company that collects your mortgage payments is your loan servicer. This may not be the

same company as your lender. If you have concerns about how your loan is being serviced or

another aspect of your mortgage, you may wish to submit a complaint to the CFPB at

consumerfinance.gov/complaint or by calling (855) 411-CFPB (2372).

When you submit a complaint to the CFPB, the CFPB will forward your complaint to the

company and work to get a response. Companies have 15 days to respond to you and the

CFPB. You can review the company’s response and give feedback to the CFPB.

http://www.consumerfinance.gov/mortgage/

http://www.consumerfinance.gov/askcfpb/

http://www.consumerfinance.gov/owning-a-home

http://www.consumerfinance.gov/find-a-housing-counselor

http://www.consumerfinance.gov/complaint


APPENDIX C:

Contact information For additional information or to submit a complaint, you can contact the CFPB or one of the

other federal agencies listed below, depending on the type of institution. If you are not sure

which agency to contact, you can submit a complaint to the CFPB and if the CFPB determines

that another agency would be better able to assist you, the CFPB will refer your complaint to

that agency and let you know.

Regulatory agency Regulated entities Contact information

Consumer Financial

Protection Bureau (CFPB)

P.O. Box 4503

Iowa City, IA 52244

Insured depository institutions and

credit unions with assets greater

than $10 billion (and their affiliates),

and non-bank providers of

consumer financial products and

services, including mortgages, credit

cards, debt collection, consumer

reports, prepaid cards, private

education loans, and payday

lending

(855) 411-CFPB (2372)

consumerfinance.gov

consumerfinance.gov/

complaint

Board of Governors of the

Federal Reserve System

(FRB)

Consumer Help

P.O. Box 1200

Minneapolis, MN 55480

Federally insured state-chartered

bank members of the Federal

Reserve System

(888) 851-1920

federalreserveconsumerhelp.g

ov

http://www.consumerfinance.gov/



http://www.federalreserveconsumerhelp.gov/

http://www.federalreserveconsumerhelp.gov/



Office of the Comptroller

of the Currency (OCC)

Customer Assistance Group

1301 McKinney Street

Suite 3450

Houston, TX 77010

National banks and federally

chartered savings

banks/associations

(800) 613-6743

occ.treas.gov

helpwithmybank.gov

Federal Deposit Insurance

Corporation (FDIC)

Consumer Response Center

1100 Walnut Street,

Box #11

Kansas City, MO 64106

Federally insured state-chartered

banks that are not members of the

Federal Reserve System

(877) ASK-FDIC or

(877) 275-3342

fdic.gov

fdic.gov/consumers

Federal Housing Finance

Agency (FHFA) Consumer

Communications

Constitution Center

400 7th Street, S.W.

Washington, DC 20024

Fannie Mae, Freddie Mac, and the

Federal Home Loan Banks

Consumer Helpline

(202) 649-3811

fhfa.gov

fhfa.gov/Default.aspx?Page=3

69

[email protected]

National Credit Union

Administration (NCUA)

Consumer Assistance

1775 Duke Street

Alexandria, VA 22314

Federally chartered credit unions

(800) 755-1030

ncua.gov

mycreditunion.gov

Federal Trade

Commission (FTC)

Consumer Response Center

600 Pennsylvania Ave, N.W.


Finance companies, retail stores,

auto dealers, mortgage companies

and other lenders, and credit

bureaus

(877) FTC-HELP or

(877) 382-4357

ftc.gov

ftc.gov/bcp

http://www.occ.treas.gov/

http://www.occ.treas.gov/

http://www.helpwithmybank.gov/

http://www.fdic.gov/

http://www.fdic.gov/consumers

http://www.fhfa.gov/

http://www.fhfa.gov/

http://www.fhfa.gov/Default.aspx?Page=369

http://www.fhfa.gov/Default.aspx?Page=369

mailto:[email protected]

http://www.ncua.gov/

http://www.mycreditunion.gov/

http://www.ftc.gov/

http://www.ftc.gov/



Securities and Exchange

Commission (SEC)

Complaint Center

100 F Street, N.E.


Brokerage firms, mutual fund

companies, and investment advisers

(202) 551-6551

sec.gov

sec.gov/complaint/select.shtml

Farm Credit

Administration Office of

Congressional and Public

Affairs

1501 Farm Credit Drive

McLean, VA 22102

Agricultural lenders (703) 883-4056

fca.gov

Small Business

Administration (SBA)

Consumer Affairs

409 3rd

Street, S.W.


Small business lenders

(800) U-ASK-SBA or

(800) 827-5722

sba.gov

Commodity Futures

Trading Commission

(CFTC)

1155 21st Street, N.W.


Commodity brokers, commodity

trading advisers, commodity pools,

and introducing brokers

(866) 366-2382

cftc.gov/ConsumerProtection/i

ndex.htm

http://www.sec.gov/

http://www.sec.gov/complaint/select.shtml

http://www.fca.gov/

http://www.sba.gov/

http://www.cftc.gov/ConsumerProtection/index.htm

http://www.cftc.gov/ConsumerProtection/index.htm



U.S. Department of

Justice (DOJ)

Civil Rights Division

950 Pennsylvania Ave, N.W.

Housing and Civil

Enforcement Section

Washington DC 20530

Fair lending and housing issues

(202) 514-4713

TTY–(202) 305-1882

FAX–(202) 514-1116

To report an incident of

housing discrimination:

1-800-896-7743

[email protected]

Department of Housing

and Urban Development

(HUD) Office of Fair

Housing/Equal Opportunity

451 7th Street, S.W.


Fair lending and housing issues (800) 669-9777

hud.gov/complaints

mailto:[email protected]

http://www.hud.gov/complaints

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